June 11, 2009

The perils and rewards of an ‘anytime anywhere approach to business development’

The era of choosiness is over with companies casting their nets wider in terms of business development and trawling new and existing markets for whatever business is available. Businesses that once turned their nose up at particular kinds of work have had a fundamental change of heart and are prepared to take whatever is going. But for some this is working out better than others.

The ‘anytime anywhere’ approach to business development:

Lost revenues, lost customers and slowing sales have resulted in a less
discriminate approach to business development. The shotgun has replaced the rifle, as companies target what would previously have been considered smaller, lower margin and less glamorous projects, or customers. Indeed, just like a Hoover (that is the brand of vacuum cleaner) sales teams are looking to suck up whatever opportunities are available.

The traditional boundaries between markets and segments have been leaped by suppliers in search of whatever business might be available. In an ‘anytime anywhere approach to
business development’, they are knocking on new doors and entering new markets, or segments.

Is the age of the specialist over?

In the boom years companies were afforded the opportunity to focus on the business that was most
attractive to their business. In a buoyant market they were able to focus and specialize, cherry picking customers that best suited their business. For many these trends have been reversed with companies backtracking from specialist to generalist, boutique to supermarket and nice to mass market supplier.

In many cases the commercial
imperative is simply too great and casting the business development net
wider is not a matter of choice, but there clearly are downsides. The ‘anytime anywhere’ approach often requires that companies move out of their sales and delivery comfort zone. It may also mean diverting from a tried and trusted business formula to one that is risky and less unfamiliar. It may also require a move away from the company’s core competence, or those areas in which they had unique and specialized skills, processes, knowledge and tools. This can have long term consequences for the company in terms of competitive advantage, marketplace reputation and investor appeal.

The reality is that good times or bad, some
business is just not right for your company and its bottom line. Perh
aps it entails lower margins, excessive travel, more intensive support, too much learning, or too much risk. It may also have consequences in terms of longer sales cycles and higher sales costs, or an impact on conversion rates, staff motivation and so on.

Let us return to the hoover, or vacuum cleaner analogy. Plug it in and eventually the bag gets full, but if you are picking up the wrong stuff then perhaps the hose will get stuffed and the filter will become clogged. The same can happen with indiscriminate business development efforts.

For years the advice was focus, is that now ‘old hat’?

After years of advising companies to specialize, we are slow to let go of that advice even if the economic conditions might immediately suggest that diversification into new markets and segments is required. That is because
what we call the ‘anytime anywhere approach’ to business development with its stretch into new markets, segments, new products and services can present challenges. Let us take an example:

‘We will go anywhere anytime’ said the sales director of an early stage technology company clearly under pressure to meet sales numbers. At the time we were putting the finishing touches to a sales campaign aimed at major North American hardware
vendors and until that point I had felt quite enthusiastic about the plans. At the mention of ‘anytime anywhere’ I immediately felt uneasy, it smacked of desperation and that is an ingredient that I know often impedes clear thinking.

All of a sudden the sophistication and accuracy of the target list and the sales strategy was drawn into question. If the company’s proposition appealed to everyone everywhere then too many principles of high value selling were being compromised. As it turns out the campaign had limited success so the manager availability to travel anywhere anytime did not get called on too much.

You can be average at a lot of things, but only exceptional at a few:

You can be average at a lot of things, but only exceptional at a few, and if you are lucky world beating at one. The challenge is to find what that particular niche, or talent is and to focus on, nurture and develop it. For companies, as well as individuals that discovery can require quite
a bit of experimentation along the way.

Another client of ours arrived at
strategic cross roads in terms of its target customers and projects for the second time in two years. After an intensive phase of project delivery, the consultants were both exhausted and frustrated. They were faced with the reality that much of the work they had been winning was neither profitable, nor enjoyable. It was once-off in terms of revenue and rightly, or wrongly was perceived by clients to be of a lower value. Bottom line it was not the stuff of which our clients could grow a sustainable business.

This was not the first time the company had arrived at this realization in its 3 year history, having last year closed a subsidiary business upon which it had previously placed high hopes. Would the third redirection of its focus pay-off? The reality for the managers was that it represented one last calculated gamble.

On the positive side the consultants believed they had found their niche, having invested significantly in developing specialized skills and knowledge in a particular field that they considered to be on the rise. They were undaunted in their determination to specialize in an industry of generalists and had committed their time and money to developing specialized knowledge, processes and skills in this new area.

Now almost every strategy book I have ever read would suggest that our client’s ability to strategise was fundamentally flawed. To get it wrong once, is misfortunate, but twice surely that is careless? Well, perhaps it is not, as clearly the sweet spot eludes many companies and is as much stumbled upon as discovered.

To Hover, or Not To Hover - Some Final Considerations:
There is no question that a trained athlete can compete in a variety of different events, the 600 meters, triathlon and perhaps even in the pool. However, almost every athlete has his, or her sweet spot – an event that suits them best, offers the greatest chance of success and the greatest enjoyment. The more the athlete focuses on the sweet spot, the greater their relative advantage in will be. Similarly, while most musicians can play several instruments, each has a favorite and that is probably the one for which he/she is most skilled.

So as you shape your target list for next quarter’s sales campaign and perhaps in the process reshape your companies market strategy, proceed with care. Remember the danger of trying to be everything to everybody, or seeing the whole world as your market. Even if next quarter takes you away from your sweet spot, don’t loose sight of where and how your company’s long term success will be built.

Faraway hills are always greener and that is another reason for caution in respect of adjusting your focus in terms of business development. It can be tempting to move out to new markets, or segments when the going gets tough. However, there is a danger that if you make that you will make a decision to refocus before you have adjusted your sales process and indeed the overall sophistication of your sales approach, as well as your proposition, to reflect the changed conditions for your present target market.

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